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Tuesday, 17 October 2006

The IPKat found Quads 4 Kids v Campbell on his LexisNexis Butterworth email notification yesterday, though it was decided last Friday by Patents Court judge Mr Justice Pumfrey.

Quads sold children's dirt bikes on the eBay internet auction site, as well as through more traditional sales methods. Under eBay's VeRO policy to safeguard the rights of intellectual property owners, IP rights owners could report alleged infringement by eBay sellers. This worked as follows: on receipt of information entered on its online form, eBay would remove allegedly offending items from the seller's listings, without ascertaining whether the items were indeed infringing, informing the seller of the fact that his goods had been removed.

Campbell had applied to register as Community design right a design for children's dirt bikes, asking for deferment of publication of that application. Campbell claimed that the dirt bikes sold by Quads infringed his Community design right and instigated the VeRO procedure, following which the dirt bikes were removed from Quads' eBay listings. Thereafter Campbell took no further steps to enforce his purported design rights.

Quads denied the infringement allegations and sued Campbell for bringing a groundless threat of infringement proceedings under the UK's Community Design Regulations 2005. Quad also argued that Campbell's design was invalid on the ground that it had sold its dirt bikes before Campbell filed his design application. An interim injunction was sought to stop Campbell intefering with its eBay sales pending a hearing of the main action. Accordingly Pumfrey J had to decide, as a preliminary issue, whether Campbell's submission of the VERO online form could be regarded as a threat to bring infringement proceedings.

Pumfrey J granted the relief Quads sought. In his analysis

* the test to apply was whether a reasonable person, in the position of the person allegedly threatened, would have understood that he might have been subject to infringement proceedings at some point in the future.

* in theory the operation of eBay's VeRO scheme did not mean that future infringement proceedings was a possibility. However, in this case the unsatisfactory situation would arise where Campbell could extinguish a means of Quad selling its bikes by just filling in an online form.

* this being so, the proper test here was whether eBay would have understood that it could be subject to future infringement proceedings if it had not adopted the policy of removing any allegedly infringing items. Since that was how eBay would have viewed things, there was therefore, a serious issue to be tried.

* the risk of damage to Quads, and Campbell's inability to meet any future damages award, led to the balance of convenience falling in favour of granting the injunction.

The IPKat congratulates Pumfrey J for getting it right: the main point of threats proceedings is to provide relief against attempts to stifle competition by choking channels of commerce - whether the party threatened is a wholesaler, a retailer or even a distributor. Merpel says, eBay can't be blamed for this. It would be unreasonable to expect them to perform due diligence on every item sold on its auction site.

The winner of the draw among respondents to the Journal of Intellectual Property Law and Practicereadership survey is Cedric Manara. The draw was made by two members of the Oxford University Press Practitioner Law editorial section who were not involved in either the journal itself or in this weblog: one shuffled the names and the other one drew the names, to preserve genuine impartiality. Thanks, Cedric, for taking the trouble to answer all those survey questions.

1 comment:

Dear IPKat,Bad cases make bad law. True, ebay cannot be blamed for leaving the review of its sites in questionable cases like this one. Bot how about the offer "Rolex Replika"? It is - as I see it - a clear case of trademark infringement and it can be easily detected by an electronical filter. Why should ebay - earning money with every sale of counterfeits - not contribute its own share? A little bit of housekeeping appears not unreasonable.Andreas

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